HOUSTON, Texas – Texas billionaire banker Allen Stanford, accused of masterminding a US$7.2 billion Ponzi scheme, involving his Antigua-owned Stanford International Bank (SIB), is suing United States government agents who built the case against him for a similar amount.
The suit, filed in federal district court here says the agents — including federal prosecutors, FBI agents and regional officials of the Securities and Exchange Commission (SEC) — conspired to deprive Stanford of his constitutional rights.
The lawsuit says the agents violated Stanford's rights to due process and effective counsel, as well as constitutional prohibitions against unreasonable search and seizure and excessive fines.
“Mr. Stanford alleges that agents of the United States, known and unknown, combined, agreed and conspired to deprive Mr. Stanford of his civil rights by and through tactics taken under the color of law, but which violate basic constitutional principles,” the complaint said.
The SEC sued Stanford on February 16, 2009, and won a court order freezing his assets and placing his companies in receivership.
The Justice Department followed in June with a 21-count criminal indictment. As a result, Stanford turned himself in to authorities. He has been held without bail ever since, with a judge ruling he is a flight risk.
In September, 2009, Stanford was severely beaten by another inmate at the privately run federal detention center where he was being held.
He underwent surgery, but the lawsuit says authorities ignored a hospital physician's recommendation that he be given an MRI.
The lawsuit claims Stanford was rendered incompetent due to untreated traumatic brain injuries, as well as being “overmedicated by government doctors” over a 13-month period.
Stanford alleges in the lawsuit that the government's misconduct did not begin with his treatment behind bars.
It says the SEC and the court-appointed receiver effectively began prosecuting Stanford long before he was ever charged criminally, working in concert with Justice Department officials.
The suit claims Stanford was unable to defend himself because his assets were already frozen, and the government had taken ownership of a liability insurance policy that could have paid for his defense.
In addition, the suit says the agents used Stanford's own assets to fund the case, rather than preserving the assets for investors.
The Securities and Exchange Commission declined to comment on the suit, and a Justice Department spokeswoman had no immediate comment, citing a gag order in Stanford's criminal case.
The jailed financier is accusing federal agents of using more than US$51 million of his own seized money to pay for their investigation.
“By subjecting Mr. Stanford to multiple prosecutions for the same offense, defendants have deprived him of his liberty and property,” the lawsuit claimed. (CMC)

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